ATTENTION‼️ The Stock Market is SHIFTING... — Transcript

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1. 0:00So, here's the message I gave my private
2. 0:02stock group this morning. This is
3. 0:03exactly what I said.
4. 0:05Time periods like this are exactly why I
5. 0:08always preach, don't F with margin.
6. 0:12It can get extremely serious very fast.
7. 0:15There are people in memory stocks and
8. 0:17semiconductors that are getting margin
9. 0:18called left and right. They're losing
10. 0:20their entire portfolios. I have been
11. 0:23there in 2015. It is absolutely awful
12. 0:27feeling. You don't realize how dumb it
13. 0:29all was until you finally get off margin
14. 0:31completely. There is a big difference
15. 0:33between losing gains on your stock,
16. 0:36buying a stock and going down on it, and
17. 0:39getting margin called
18. 0:41and forced to sell. The stress can be
19. 0:43beyond any money-related stress you have
20. 0:45ever experienced. It's absolute hell and
21. 0:47I mean that.
22. 0:49Keep the game simple. More income than
23. 0:51expenses, put in the research work, buy
24. 0:54great companies at discounts, focus
25. 0:56long-term, sell what overvalued or you
26. 0:59have a better place to put the money.
27. 1:00You will be shocked at what you can
28. 1:02achieve over 10 to 20 years. Many time
29. 1:06periods when you're going through a, you
30. 1:08know, and we're we're with Q's down 15%
31. 1:11plus, when you're in these sorts of time
32. 1:13periods, people completely lose track of
33. 1:16time. They get so caught up into
34. 1:18whatever is going on in that short-term
35. 1:20time period that they're they're not
36. 1:22even thinking a year from now. They're
37. 1:24not thinking 3 years from now. They're
38. 1:25not thinking 5 years from now. They're
39. 1:27not thinking 10 years from now. They're
40. 1:28thinking about today, tomorrow, how much
41. 1:31are stocks going to be down tomorrow?
42. 1:32Are we going to bounce back? Are we
43. 1:34going to have a V-shaped recovery and
44. 1:35those sorts of things? And they
45. 1:35completely lose the plot and they
46. 1:37completely lose like what they can
47. 1:39achieve over the next 10 to 20 years,
48. 1:41right? Don't get caught up into that
49. 1:43trap like because I'm just telling you
50. 1:45that's not where the real money's at.
51. 1:46The real money is really focusing
52. 1:48long-term in this game and you will be
53. 1:50shocked at what you can achieve. Where
54. 1:51people have gotten in trouble
55. 1:53is you had some people out there that
56. 1:55made some money money on some of these
57. 1:56semiconductor stocks and it wasn't
58. 1:58enough. So, they started margin. So they
59. 2:01started to buy leverage plays. So they
60. 2:03started to play short-term options on
61. 2:06these stocks, right? And now they're
62. 2:08completely blowing up their portfolio.
63. 2:10Not like, oh, I'm down 5% my portfolio
64. 2:13today or down 8% my portfolio today or
65. 2:15down 3%. No, no, no. They're blowing up
66. 2:17their portfolios. They're down like 30%
67. 2:20today, 40% today. We're not talking
68. 2:22about what has already occurred in their
69. 2:24portfolios. We're talking about today.
70. 2:27And so and it's not just retail
71. 2:28investors. There's hedge funds in these
72. 2:30sorts of situations that could go go
73. 2:31completely under and end up getting
74. 2:33liquidated. And so it can get very
75. 2:35serious very fast. People don't take it
76. 2:38serious until they really get slapped in
77. 2:41the face. Until that they they oh, it's
78. 2:44no big deal. Like it's going to come
79. 2:45back, you know, when they're on margin.
80. 2:47And then it just gets worse and worse
81. 2:48and worse. And they're like, I'm not
82. 2:50worried. And then it gets worse. And the
83. 2:52next thing you know, they're like, crap,
84. 2:53if this market even goes down another
85. 2:552%, I'm getting margin called. And
86. 2:57that's how it happens, ladies and
87. 2:58gentlemen. And and if you're wondering
88. 3:00like how you get these sorts of sell
89. 3:02offs,
90. 3:04fear comes in, margin calls come in,
91. 3:06liquidations happen, forced selling
92. 3:09happens, panic selling happens, and it
93. 3:11all happens at the same exact time. Look
94. 3:13at these moves. This was today, okay? So
95. 3:16FNXX,
96. 3:18that SanDisk 2x leverage there was down
97. 3:2043% today. MUU, this is a popular one a
98. 3:24lot of people like to play. It's a 2x
99. 3:26leverage on MU stock. It was down 34%
100. 3:30today, today. SanDisk down 22% a dosy do
101. 3:34there. AMD AMD 17 and 1/2% here today.
102. 3:39MU was down over 17%. This is like the
103. 3:42AI trade watchlist I have. This IREN
104. 3:45stock, this is in that group as well,
105. 3:4617%. Marvell Technology 16 and 1/2%.
106. 3:50Bloom Energy 16% down today. This Nebius
107. 3:53or whatever is down 15% here today. TSM
108. 3:56down 10%. Avago down 10%. CoreWeave down
109. 3:5910%. NVIDIA down 9%. SpaceX down 9%,
110. 4:02GEVernova down 7%, Caterpillar down 6%.
111. 4:05Caterpillar, I swear, Caterpillar,
112. 4:07wasn't Caterpillar stock like $1,000
113. 4:09plus like not that long ago? Like just a
114. 4:11few months ago, wasn't it? And now it's
115. 4:13500? Like what a drop, right? In
116. 4:15Caterpillar stock. Incredible, right?
117. 4:18So, this is a one-month chart here,
118. 4:20right? Look at the Qs. The Qs are now
119. 4:22down 15% plus from their highs. Avago
120. 4:25down 23% over the past month. Nvidia is
121. 4:28down 25%. GEVernova is down 26%. TSM is
122. 4:32down 27%. SpaceX is down 29%.
123. 4:35Caterpillar is down 36%. MU is down 38%.
124. 4:39AMD is down about 39%. Bloom Energy is
125. 4:42down 43%. SanDisk is down 52%. Core
126. 4:44Weave is down 52%.
127. 4:46This
128. 4:47Nebius or whatever is down 52%. Marvel's
129. 4:49down 54%.
130. 4:51IREN's down 57%.
131. 4:54MU is down 65%.
132. 4:56In this SanDisk 2x leverage is down 80
133. 4:59percent, ladies and gentlemen. 80
134. 5:01percent, okay? So,
135. 5:06what what do I have to say about this?
136. 5:08Well,
137. 5:11situations like this
138. 5:13can come out of nowhere, right? And it
139. 5:16doesn't matter in the short term what
140. 5:19your earnings are, right?
141. 5:21Over the long term, earnings dictate the
142. 5:23whole game. What's your earnings per
143. 5:25share going to? What type of valuation
144. 5:27should your company command? All the
145. 5:28fundamentals we look into, right? But in
146. 5:31the short term,
147. 5:33it's irrelevant.
148. 5:34It doesn't matter what Micron's going to
149. 5:36earn this year or next year. Doesn't
150. 5:38matter what AMD's going to. If if Wall
151. 5:40Street is facing margin calls and
152. 5:43getting liquidated and selling breed
153. 5:45more selling,
154. 5:47doesn't matter. Doesn't matter.
155. 5:49Nothing's going to save you in the short
156. 5:51term.
157. 5:51If if, you know,
158. 5:54some memory chip stocks trading at a
159. 5:56forward P of four,
160. 5:58doesn't mean it can't go to three in the
161. 5:59short term. It doesn't matter in the
162. 6:01short term.
163. 6:02In the the term, everything else
164. 6:04matters. Who won an election,
165. 6:07uh who's got to get liquidated or
166. 6:08doesn't. These are all the things that
167. 6:10that matter in the short term. What's
168. 6:12the perspective at a particular time,
169. 6:15right? MU had a pause
170. 6:18uh a memory chip plant factory uh if I
171. 6:21recall in Taiwan over like a labor
172. 6:24dispute situation and people are running
173. 6:26with that today and being like, see it's
174. 6:28all AI bubble like no one needs memory
175. 6:30chips anymore and things like that. It's
176. 6:31just people run whatever narrative they
177. 6:33want to in the short term. It it doesn't
178. 6:35matter. They're going to make up
179. 6:36whatever narrative they want to make up
180. 6:38in the short term. And so you got to
181. 6:40understand like
182. 6:42you you and I say this all the time, you
183. 6:44and I we can't control where these stock
184. 6:46prices go short term. We can't.
185. 6:49If they want to send an AMD to $800
186. 6:547 months from now, they'll send it to
187. 6:55$800. They want to send it to 300 7
188. 6:58months from now, they'll send it to 300
189. 7:00and there's nothing you and I can do
190. 7:02about that. AMD will come out their
191. 7:04earnings. They should be bangers,
192. 7:06but there's nothing we can do to control
193. 7:07the stock price in the short term.
194. 7:09The stock price will be what the stock
195. 7:10price is going to be in the short term.
196. 7:12Like there's nothing. If they all sudden
197. 7:14decide to flip the narrative and they're
198. 7:16like buy buy buy, they're going to buy
199. 7:17it right up. If they want to keep
200. 7:19putting the selling pressure on the
201. 7:20short term, you know, they'll keep
202. 7:22putting it on. And so um something
203. 7:25really important you got to understand
204. 7:26about these sell offs, okay?
205. 7:29Um
206. 7:31a few things. One,
207. 7:33Q's down 15 % this is not unprecedented.
208. 7:36This is nothing crazy. I watched the Q's
209. 7:38go down 20 plus percent
210. 7:40countless times and so we're not even at
211. 7:42a 20 percent plus move yet. That doesn't
212. 7:44mean we're going there, but I'm just
213. 7:46like we're not even there. And usually
214. 7:48the Q's doesn't relent until you get to
215. 7:50a 20 percent plus downside. So that's
216. 7:52something to consider here, right? Um
217. 7:55you know, I watched in 2018, you know,
218. 7:57and I was in the market and it hurt.
219. 7:59Like 2018 we went down the Nasdaq went
220. 8:01down over 20 percent from you know, kind
221. 8:04of that October time frame to right
222. 8:06around Christmas. And in that December,
223. 8:08we were on pace for the worst stock
224. 8:10market for December since the Great
225. 8:12Depression. It was it was insane, right?
226. 8:15So that that's one thing to to factor in
227. 8:18here. Another thing to factor in here is
228. 8:22it can always get worse, right? And I
229. 8:25know that sounds scary. It can always
230. 8:27get worse. You have to always be
231. 8:28mentally prepared for even more damage,
232. 8:31right? Next thing to consider, this
233. 8:33one's really really important.
234. 8:37A lot of times the stock market won't
235. 8:39bottom
236. 8:41until
237. 8:43the leverage is really unwound
238. 8:46and max pain is really felt and people
239. 8:49really throw in the towel and they say I
240. 8:51can't take it anymore. Until that
241. 8:53happens, a lot of times you can't get a
242. 8:56true bottom in these sorts of
243. 8:57environments. So, you know, was today a
244. 9:00bottom? It's possible. Um you know,
245. 9:03there there could you know, what if
246. 9:04there's a flush tomorrow? That could be
247. 9:06a bottom, right? And the shorts start,
248. 9:08you know, covering their shorts. Like
249. 9:09that's always a situation, but
250. 9:11always prepare for it to get worse,
251. 9:14right? Like if the public account today
252. 9:17I don't know where the public account
253. 9:18was at today. Um let's say the public it
254. 9:22might have been $4.6 million today,
255. 9:24right?
256. 9:26I'm mentally prepared for the public
257. 9:28account to go down 3.6 to 3.6 million.
258. 9:31There's really nothing I'm not prepared
259. 9:32for in public. It could go down to 2
260. 9:33million. It would lose over 50% of it.
261. 9:35I'm I'm just like mentally prepared for
262. 9:37anything,
263. 9:38right? And if the public account wants
264. 9:40to, you know, let's say we bottom
265. 9:42tomorrow morning and market starts
266. 9:44heading up from there and next thing you
267. 9:45know, 9 months from now the public
268. 9:46account's 7 million, I'm prepared for
269. 9:48that. I'm whatever, throw it.
270. 9:51But you can only get to that place if
271. 9:52you got more income than expenses,
272. 9:54right? So you got your money right,
273. 9:56you're doing the research, you know
274. 9:57you're buying great companies that are
275. 9:59going to be great companies for the next
276. 10:005 10 years, right? And you're focusing
277. 10:03on the long term.
278. 10:04That's the that the way you get to that
279. 10:06sort of place and you don't mess with
280. 10:08margin or any of these leveraged things
281. 10:10that people are messing with, right?
282. 10:12Now, uh in terms of my particular
283. 10:14stocks, obviously AMD got just hammered
284. 10:17today. We know that. Palantir has got
285. 10:19hit hard. You know, when you're going to
286. 10:21be in a risk-off situation, Palantir is
287. 10:23going to sell off. Same thing with SoFi.
288. 10:25I always talk about SoFi like that's the
289. 10:26sort of stock that, you know, if the
290. 10:28market's crashing, you got the Nasdaq
291. 10:30going down 5 6% like there's just no way
292. 10:32SoFi is going up in that environment.
293. 10:33It's going down Chinatown, right? Fubo,
294. 10:35same exact situation. Shopify fits that
295. 10:37category as well. Uh now it's not even
296. 10:39part of my portfolio, so I don't know
297. 10:41why that was there. Um RH got hit, but
298. 10:43not hit as hard as you might think uh
299. 10:45because a lot of money's rotating into
300. 10:47some of the value plays, so keep that in
301. 10:48mind.
302. 10:50Uh K got hit 4% today for a high flyer
303. 10:52like Cake. That's not bad, right? Estée
304. 10:54Lauder got hit 3.9%. Meta got hit 3.9%
305. 10:58here today. Win got hit 3.7%. Elf got
306. 11:02hit a little bit 3.3% on the back of
307. 11:04their great earnings. Celsius was only
308. 11:06down 2%. You know, if it wasn't for the
309. 11:08market getting so hammered today, I
310. 11:09think Celsius would have had a probably
311. 11:10up 5 to 10% day. Their earnings were
312. 11:13solid. I graded them a B grade. Revenue
313. 11:15was better than I had anticipated, so I
314. 11:17was very happy with that. Cost of
315. 11:18revenue was a problem. Um bottom line
316. 11:21got shaped up because of no termination
317. 11:22expense this year. So Celsius was a
318. 11:25solid earnings. It was a B grade. Um I'm
319. 11:28very optimistic on that company over the
320. 11:29next several years, right? Hear what I
321. 11:31Hear the way I'm talking over the next
322. 11:32several years. Over the next 3 weeks,
323. 11:34who knows where Celsius stock goes? I
324. 11:36don't know and I don't care. It can go
325. 11:3825, it can go to 30, it can go to 35. I
326. 11:40don't care. You know, that's the sort of
327. 11:42perspective you got to have as a
328. 11:43long-term investor. Short-term
329. 11:45fluctuations in great companies is just
330. 11:47a buying opportunity, right? American
331. 11:48Express, would I would I rather buy
332. 11:50American Express at $224, $324, or $424?
333. 11:54Um let's see. Uh I think I'd rather buy
334. 11:57it for $224, right? American Express
335. 11:59down 2%, Nike down 2%. A lot of these
336. 12:02stocks were not getting hit that hard.
337. 12:04It's specifically AI trade related,
338. 12:07right? And why is it that the AI trade
339. 12:11is getting hammered so hard.
340. 12:15Well,
341. 12:17the market is running to this conclusion
342. 12:19that Democrats won, so you know, the AI
343. 12:22trade's over. And um
344. 12:26you know, you can't build data centers
345. 12:27anymore or it's going to be so hard to
346. 12:29and all these sorts of things, right?
347. 12:31Such a ridiculous such a ridiculous
348. 12:34thing. But this is what the market does.
349. 12:37Elections happen,
350. 12:38the market freaks out, and um
351. 12:42then a couple weeks later it doesn't
352. 12:45even care about it. It's like the market
353. 12:47gets dementia. Like literally that's how
354. 12:49it is. In my 18 years being in this game
355. 12:51like the market will freak out about
356. 12:53something and
357. 12:55a few weeks later it doesn't even care.
358. 12:57It's unbelievable. The Rona crash was a
359. 12:59perfect example of that. The Rona crash
360. 13:01was a worldwide phenomenon. They're
361. 13:03going to shut down the economy for 3
362. 13:05years. Who's going to even make it
363. 13:07through that? Everybody's going to go
364. 13:08bankrupt, right?
365. 13:09And the I mean the market would just was
366. 13:12just making shocking move after shocking
367. 13:14move day after day after day for like a
368. 13:16month and a half straight, right? Just
369. 13:18plummet. Fastest stock market crash in
370. 13:20history. Like S&P 500 I don't think ever
371. 13:22went down you know, 34% that fast ever.
372. 13:25Like it it made the great financial
373. 13:27crisis look like a walk in the park in
374. 13:29terms of how fast the market went down,
375. 13:32right?
376. 13:33By the time you got to April 2020
377. 13:36it was like it didn't even care
378. 13:38oh about Rona anymore. It was
379. 13:41unbelievable.
380. 13:42And here you are with a once in a
381. 13:43hundred like this is way more severe
382. 13:45than
383. 13:46AI data centers and Democrats won and I
384. 13:49I don't know if we're going to be able
385. 13:50to build them like Rona was so much more
386. 13:52serious. That was the most serious thing
387. 13:54that ever occurred in my 18 years of
388. 13:57being in the stock market and remember I
389. 13:58started in the great financial crisis.
390. 14:00Rona was a lot scarier than the great
391. 14:01financial crisis because at least
392. 14:03businesses could still operate. When
393. 14:05when Rona was at peak fear the Black Man
394. 14:07was on TV crying. They're talking about
395. 14:10closing the economy for 3 years, right?
396. 14:12I mean that's just crazy. And that was
397. 14:14the scariest moment by far
398. 14:16uh we ever seen the stock market. You
399. 14:17know, 2022 was a very hard hit, but that
400. 14:20was not even near as scary as what
401. 14:22happened in 2020, right? So speaking
402. 14:24about 2020, you have this happen here
403. 14:26today. Retail investors flee single
404. 14:28stocks at fastest pace since Rona.
405. 14:30Retail investors abandoned their
406. 14:32signature dip buying playbook on
407. 14:34Thursday to dump individual stocks at
408. 14:36the fastest pace since the depths of the
409. 14:38March 2020 Rona crash, according to
410. 14:41Vanda Research. In Thursday's
411. 14:42mid-afternoon trade, the Dow was down
412. 14:441,700 points, S&P 500 down huge, Nasdaq
413. 14:47down huge. That comes a day after major
414. 14:48averages scored big wins on the back of
415. 14:50mid-term election results. Shortly
416. 14:52before market close, retail net outflows
417. 14:55from single stocks reached $338 million,
418. 14:58Vanda noted. The sell-off marks the
419. 15:01third largest day of retail single stock
420. 15:04liquidation on record,
421. 15:06trailing only March 12th and March 17th,
422. 15:092020.
423. 15:12While retail traders typically support
424. 15:14falling markets by buying dips, that
425. 15:16appetite disappeared from individual
426. 15:18equities, leaving the day's remaining
427. 15:20purchases narrowly concentrated in
428. 15:23leveraged product uh products.
429. 15:25Wow.
430. 15:27Wow.
431. 15:28Incredible, right? So
432. 15:31retail selling, you know,
433. 15:33why? Why? I think there's a few reasons.
434. 15:37I think
435. 15:38Well, I don't think the data shows
436. 15:42a lot of retail is heavily on margin.
437. 15:45Heavily on margin. The thing I preach
438. 15:46against all the time on the channel,
439. 15:48don't mess with margin, don't mess with
440. 15:50margin. Apparently, people think they're
441. 15:52smarter than everybody else and they can
442. 15:54go on margin, right? And
443. 15:57they quickly learn
444. 15:59it's not as easy as it seems. It's
445. 16:01always a trap. It's always a trap. It's
446. 16:03like, mm, think about how much more
447. 16:06money you can make. And meanwhile, you
448. 16:07have to pay interest on that as well and
449. 16:09you're just getting obliterated. It's
450. 16:10it's awful, man. It's always a trap and
451. 16:12it just gets people again and again and
452. 16:14again. So I believe, why is retail
453. 16:17actually selling?
454. 16:19I believe they're actually selling
455. 16:20because they're being forced to sell, a
456. 16:22lot of them. Now, are there some that
457. 16:23are panicking and they're just scared?
458. 16:26Sure. But I think a lot of the selling
459. 16:29my my hunch is, as somebody who's been
460. 16:31playing this game for a long time, I
461. 16:32think there's margin calls happening
462. 16:34across the board in retail. I think
463. 16:36they're getting devastated and I think
464. 16:38the ones not only is it people that are
465. 16:40actually getting margin called, so
466. 16:42they're being forced, but it's people
467. 16:44that
468. 16:45are getting close to margin calls and
469. 16:47they're panicking because they're like,
470. 16:48oh my gosh, all it takes is the Nasdaq
471. 16:50going down 2% more, Micron to go down
472. 16:53this much more, Avago to go down this
473. 16:55much more, AMD or Nvidia or whatever,
474. 16:57right? All it takes is those stocks to
475. 16:58go down this much more and
476. 17:01I'm going to get margin called. So
477. 17:02they're trying to sell before the margin
478. 17:03calls as well, right? And the data shows
479. 17:06it. Like margin is, you know, if you
480. 17:09look at the latest data we had, margin
481. 17:11was right around the highest we've ever
482. 17:12seen in history.
483. 17:14You don't get up to those sorts of
484. 17:15numbers without, you know, people being
485. 17:18insanely optimistic and they're usually
486. 17:20slap And this that's the thing about
487. 17:21this, that's the scariest thing is
488. 17:24people have the fundamentals to back it.
489. 17:25They're like, look at how much money all
490. 17:27these companies are earning. So they
491. 17:28feel safe. They feel like safe margining
492. 17:31out on Nvidia. They feel safe margining
493. 17:33out on AMD. They feel safe margining out
494. 17:36on SanDisk or Micron or SK Hynix or
495. 17:38Samsung or whatever memory chip plays.
496. 17:41They feel safe because they're like,
497. 17:42look at how much money they're earning.
498. 17:45Listen, that doesn't matter in the short
499. 17:47term.
500. 17:48That does not matter in the short term.
501. 17:50They could be earning a trillion dollars
502. 17:52in the short term. It doesn't matter. If
503. 17:54the market's freaking out,
504. 17:56the there's nothing that's going to save
505. 17:59there's no amount of earnings that's
506. 18:00going to save that stock in the short
507. 18:01term. That's just the bottom line. You
508. 18:03look at what happened in the 2020 crash.
509. 18:06Didn't matter how much money you were
510. 18:07making. Didn't matter if you were Apple
511. 18:09or you were Microsoft or you were
512. 18:13I don't know, Ford or you were General
513. 18:15Motors or you were Tesla or you know,
514. 18:18you were a home builder, your your
515. 18:19stock's going down. Chinatown. Doesn't
516. 18:21matter how much money you make. If the
517. 18:23market's
518. 18:24freaked out,
519. 18:25if you're getting margin calls left and
520. 18:27right, if funds are blowing up,
521. 18:30doesn't matter. [clears throat]
522. 18:31You know, you make all the money in the
523. 18:32world, it doesn't matter in the short
524. 18:34term, man. And that's the thing people
525. 18:36don't understand about corrections in
526. 18:38the market and crashes in the market is
527. 18:41if if like it doesn't matter, man. Like
528. 18:44like whatever's going on in the short
529. 18:45term, that's what everybody's caught up
530. 18:47into. Hey, it's Jeremy. I hope you
531. 18:48really enjoyed that clip here today.
532. 18:50Listen, there are three main areas a
533. 18:52long-term investor has to understand.
534. 18:55You have to understand financial
535. 18:57statements, income statements, balance
536. 18:58sheets, cash flows. You have to
537. 19:00understand and master portfolio
538. 19:02management, and you have to have the
539. 19:03ability to project what is possible for
540. 19:06companies in the coming years. Bear
541. 19:08scenarios, bullish scenarios. All these
542. 19:10skills can be learned, and that's the
543. 19:12good news. And I'm still just a regular
544. 19:14guy who's out here that just have a lot
545. 19:16of passion for the market. I've learned
546. 19:17a lot over the last 15 years. I had a
547. 19:19tremendous amount of success, and I have
548. 19:21a dedication to teaching people
549. 19:23everything I have learned in the past 15
550. 19:25years. I can do it, you can do it, too.
551. 19:28You can learn all that's required to
552. 19:30become a great investor in my private
553. 19:32group. The application is going to be
554. 19:34down there in the description area. You
555. 19:35can click on that, fill in the
556. 19:36application, join us in the private
557. 19:38group, get access to all my best course
558. 19:40curriculums teaching you everything that
559. 19:42I got in my head, and you get ability to
560. 19:45join our six-figure, seven-figure Hall
561. 19:47of Fame. We have such a tremendous
562. 19:50Discord is incredible. So once again,
563. 19:53description area down there, there's a
564. 19:54link. You can apply to join my private
565. 19:57group in there. Listen, Elf on a Shelf.
566. 20:02A plus, baby. Look at this. Net sales
567. 20:05growth, 51%.
568. 20:07Cost of sales only up 43%. Gross profit,
569. 20:1055% growth year over year. SG&A,
570. 20:1330% will take that when gross profit's
571. 20:15up 55% and revenue's up 51%, right? Now
572. 20:19there there's change in fair value of
573. 20:20contingent consideration that was a
574. 20:22almost, you know, a little under $18
575. 20:24million hit. That's usually a one-office
576. 20:25category there. So, do keep that in
577. 20:27mind, right? But it's a hit. Uh
578. 20:29operating income up 579%
579. 20:32year over year to $52 million from $7.7
580. 20:34million the same quarter last year.
581. 20:36Other income was uh very positive. So,
582. 20:39that was uh $563,000
583. 20:42positive versus $1.9 million negative
584. 20:45the same quarter last year. Interest
585. 20:46expense was up 9% for the company year
586. 20:48over the year there. So, do keep that in
587. 20:50mind, right? Net income grew
588. 20:53Net income grew 902%
589. 20:55year over year. Diluted EPS grew 900%
590. 20:58year over year.
591. 21:00I mean, that's an A plus, baby, you
592. 21:01know?
593. 21:03Now, you might say, why didn't I grade
594. 21:05them in A plus plus?
595. 21:07I didn't grade them in A plus plus
596. 21:09because of a a couple factors here,
597. 21:12right? Interest expense going up a bit,
598. 21:14but that's not really my worry.
599. 21:16The [clears throat] bottom line is I
600. 21:17grade them an A plus and not A plus plus
601. 21:20because their their net their net income
602. 21:22margin is still really bad, right? $520
603. 21:24million of revenue and only $30 million
604. 21:26in of net income. It's a really bad net
605. 21:28income margin. The good news is it's on
606. 21:30the right track and um they should be
607. 21:32able to expand this rapidly over the
608. 21:34next two to three years.
609. 21:35But
610. 21:36the moral of the story is this is still
611. 21:38a really weak uh net income margin here.
612. 21:40Now, let me show you this. This is
613. 21:42Elve's balance sheet. Cash and cash
614. 21:44equivalents went to $350 million from
615. 21:46$194 million. Accounts receivable uh
616. 21:49$246 million versus $154 million at the
617. 21:52same time last year. And they brought
618. 21:54inventory up a bit too to $260 million
619. 21:56from $247 million in the same quarter
620. 21:59last year. Long-term debt they brought
621. 22:00down from $831 million to $794 million.
622. 22:03But do keep in mind there's this other
623. 22:04category here that they have now they
624. 22:06didn't have last year. Uh long-term
625. 22:08contingent consideration, $68 million
626. 22:11there. So, do keep that in mind. But
627. 22:13overall the balance sheet looks
628. 22:14phenomenal and it looks way stronger
629. 22:16than it was even at this time last year,
630. 22:18right? So, I like this. Now, the
631. 22:21guidance. Look at this. Oh baby. Uh now
632. 22:26the company is updated the 2027 outlook
633. 22:29to expect over $2 billion of revenue.
634. 22:32Listen, I already laid this all out. I
635. 22:34laid the whole game out for ELF, right?
636. 22:36This stock was four You could have
637. 22:37bought the stock back in the summertime,
638. 22:38back in June for $49, right?
639. 22:41And people tomorrow will probably be
640. 22:42paying I don't know. Who They'll be
641. 22:43paying 120 or whatever price, right?
642. 22:46125, 130, whatever, right?
643. 22:48I laid it all out. I told you guys they
644. 22:50always come in sandbag the guide very
645. 22:52low it usually in the springtime, and
646. 22:55then they come in beat those numbers
647. 22:57throughout the year and keep up in the
648. 22:58the guidance throughout the year and
649. 23:00next thing you know everybody loves ELF
650. 23:01stock, right? It's the same game. I I
651. 23:03watch them do this almost every single
652. 23:05year. And uh people still get caught in
653. 23:07the trap of selling their stock in the
654. 23:09spring and uh and then they watch it go
655. 23:12flying in the summer and for the
656. 23:13remainder of the year and they're like,
657. 23:14what the
658. 23:15heck did I do, right? Adjusted EBITDA
659. 23:18now they're expecting $421 million to
660. 23:20$427 million
661. 23:21of EBITDA, so we can call that a 424
662. 23:23midpoint. I'll probably bring that up
663. 23:26Uh, 424 midpoint versus 404 was
664. 23:29expected. Net income now is expected to
665. 23:32be 232 million midpoint versus before
666. 23:35was like a 213.5 million dollar
667. 23:37midpoint, right? Uh, adjusted diluted
668. 23:40EPS 382 Uh, so we can call it 384,
669. 23:44right? Versus before they were at about
670. 23:45352, 353.
671. 23:48It's phenomenal, man. Like everything's
672. 23:50So is ELF still a buy? Here's the deal
673. 23:53and here's my price targets for ELF on a
674. 23:55shelf. Listen.
675. 23:58I've told you guys I think the stock
676. 24:00exits this year 120 to 140, right?
677. 24:04I just continue to believe that. I think
678. 24:05it exits worst case scenario 120, best
679. 24:08case scenario maybe around 140, right?
680. 24:11Long term this is a 300 to $500 stock in
681. 24:14my opinion.
682. 24:15So um it's still a buy. It's still a
683. 24:19buy. Like is it as good of a buy as it
684. 24:21was earlier this year when it was $49?
685. 24:23No.
686. 24:24But you know
687. 24:26the train's leaving without you, so you
688. 24:29know you can be on the train, you don't
689. 24:30have to. It's up to you, right? You
690. 24:32know, but
691. 24:33it's a money maker. It's a money maker.
692. 24:36And it's just it's it's such a funny
693. 24:37stock though, man. People get freaked
694. 24:39out of it and they sell it and they when
695. 24:42they sell it, they really sell it. And
696. 24:45then uh it goes in these rallies that is
697. 24:47just unbelievable. I mean, just think
698. 24:48about the rally it's been on. You know,
699. 24:50it was $49 back in June. It's 118 now.
700. 24:54Like I said, I don't be surprised if the
701. 24:55stock you know, my midpoint for where
702. 24:57the stock exits the year is 130.
703. 25:00From 49 to 130?